FX.co ★ GBP/JPY Elliott wave count and Fibonacci levels, October 6, 2010

According to wave count this currency pair is standing at the beginning of potential wave C of daily degree - colored royal blue in the chart. Break above 135.03 is needed to confirm. However if 130.78 is broken to the downside this upmove will be considered corrective wave B. From shorter term perspective there's a corrective wave to 130.78-132.93 developing. Its targets are Fibonacci retracements of 130.78-132.93.

Supports:

- 131.86 = .50 retracement
- 131.60 = .618 ret

In case the price moves any lower its next strategic supports is:

- 130.45 = .618 ret (127.62-135.03)

The nearest resistances are Fibonacci retracements of 135.03-130.78 and expansions off 130.78-132.93-131.81.

Resistances:

- 132.91 = .50 ret
- 133.14 = conrtracted objective point (COP)
- 133.41 = .618 ret
- 133.96 = objective point (OP)

Overbought/Oversold

The Detrended Oscillator is oscillating around the zero level confirming the flat. Assuming that the med term trend is up it's preferable to seek for bottoming signals when the price reaches a Fibonacci support or gets into the oversold - 30 pips to go.

Read more on how to apply Fibonacci studies to calculate price targets.